Justin P. Swearingen

1. Justin P. Swearingen Laws, Regulations, and Governance

2. The Law • A system of principles and rules devised by organized society for the purpose of controlling human behavior • The law usually provides general guidance rather than an exact blueprint • Law is constantly changing in response to economic and social developments and simply reflects the beliefs of society at any given time • Even the constitution can (and does) change with the passage of any amendment • Application is a complicated art: “it depends” is the most common answer • Therefore, this lecture is meant for discussion purposes only and competent legal advice should be sought before any actions are taken

3. 3 Branches of the Federal Gov’t • Legislative • Elected officials of congress (both the house and senate) pass statutory laws • Judicial • Interprets the constitutionality of laws • Executive • Agencies (FDA, CMS, DHHS) that enforce and regulate laws

4. Sources of Law • Legislative Actions (of Federal and State) • Codified Law (Statues/Acts) • Affordable Care Act • Judicial Decisions • Become “common law” • Supreme Court upholding individual mandate • Executive Law • Executive Orders • Agency Regulations (“Administrative Laws”) • IRS deciding how the fine would be collected Generally, the congress (legislative) and courts (judicial) make laws that government agencies (executive) interpret in order to make rules to specify public guidance

5. Checks and Balances

6. Important Concepts • The U.S. Constitution is the “supreme law of the land” • Against which all statues and administrative rules are judged • All powers not granted to the federal gov’t in the constitution are reserved by the individual states • Federal laws always supersede state laws • Stare Decisis • “let the decision stand” • Courts must make decisions based on past precedent of higher courts • Res Judicata • “The thing decided” • You only get once chance and that decision is final (no 2nd lawsuits)

7. Structure of the Courts

8. Public Regulatory Agencies Under the Executive branch, federal, state and local regulatory agencies are often charged with making “administrative” rules and regulations for the health care industry, and their oversight is mandatory • The Food & Drug Administration (FDA) is responsible for the oversight of drugs, medical devices, vaccines, blood products and biologics, establishing rules for testing, clinical trials and approval of new products • The Centers for Disease Control & Prevention (CDC) monitors and controls infectious diseases and assists other local, national and international agencies/facilities to prevent the spread of disease • The Occupational Safety & Health Administration (OSHA) establishes and monitors safety regulations regarding workers • State Department of Health Regulations

9. Private Regulatory Agencies • The Joint Commission (formerly the Joint Commission on Accreditation of Healthcare Organizations or JCAHO) • Private, nonprofit organizationthat accredits health care organizations • Joint Commission accreditation is a condition of licensure for the receipt of Medicaid reimbursement • Sets many rules and recertifies/inspects all hospitals every 3 years http://www.jointcommission.org/multimedia/a-world-of-difference--video-presentation/ • Medicare Quality Improvement Organizations (QIOs) • Private contractor extensions of the federal government that work under CMS to monitor the appropriateness, effectiveness, and quality of care provided to Medicare beneficiaries

10. Negligence • Determining negligence depends on the Standard of Care • Medical malpractice cases generally have to prove a breach in the standard of care • Malpractice is professional negligence: the failure to adhere to legally imposed professional standards (and it sometimes based simply on lack of “reasonable care”) • The standard of care in most malpractice cases says: “A physician is bound to bestow such reasonable and ordinary care, skill, and diligence as physicians and surgeons in good standing in the same neighborhood, in the same general line of practice, ordinarily have in like cases.” • Because of this, expert testimony from other doctors in the same field practicing in the same locality are often used in malpractice cases

12. Emergency Medical Treatment and Active Labor Act (EMTALA) of 1986 • Requires hospitals to provide care to anyone needing emergency healthcare treatment regardless of legal status or ability to pay • Duty to assess and stabilize • May transfer if benefits > risks • Applies to all hospitals that participate in Medicare (virtually all) • Impetus was refusal to treat people because of inability to pay and patient dumping (transferring nonpaying patients) • Creates “partial” universal access and improved access for uninsured • Also creates overburdened, underfunded and fragmented emergency system • Cost of screening, examining, and stabilizing is considerable • Patients are still legally responsible for any costs incurred • Creates an unfunded mandate where hospitals must treat patients without a corresponding method of payment • Places cost of partial universal access onto the hospitals

13. Employee Retirement Income Security Act of 1974 (ERISA) • Regulates pension plans and employee benefit plans in private industry • Preempts all state laws that relate to any employee health plan • 125+ million Americans with employer-paid health coverage in the private sector are unable to sue their insurance companies for damages • Even if benefits are improperly denied, the insurance company cannot be sued for any resulting injury or wrongful death, regardless of whether it acted in bad faith in denying benefits • Only remedy for denied benefits or dropped coverage is to seek an order from a federal judge (no jury trial is permitted) directing insurance company to pay for "medically necessary" care they should have paid in the first place • If a person dies before the case can be heard, the claim dies, since ERISA provides no remedy for injury/wrongful death caused by withholding of care • Thus there is no financial incentive for the HMO to provide timely treatment • “This is like limiting the penalty for bank robbery to making the bank robber give back the money” • Permitting these insured persons access to customary remedies could result in a substantial reduction in arbitrary denial of care benefits

14. False Claims Act of 1863 • Imposes liability on persons and companies who defraud governmental programs • Prohibits knowingly • Presenting a false or fraudulent claim • Using a false record or statement to get a claim paid • Avoiding an obligation to pay back the government • Helps to reduces Medicare fraud • HUGE issue as claims are paid automatically (because the goal of Medicare is not to root out false claims, but to pay claims quickly and smoothly) • The Office of Management and Budget found that Medicare "improper payments" were almost $50 billion of the nearly $500billion budget (10% fraud)

15. AntikickbackStatute of 1972 • Concerned with overutilization, Congress prohibited any person to solicit or receive payments to induce referrals, services or items paid for by a federal health program • Purpose: to control the influence of financial incentives on physician decision making • Actions must be “knowing and willful” and specific intent is required • Violation = felony • Fine up to $25,000 • Imprisonment up to five years • Limited exceptions (requires legal advice) • Examples: • A home health agency paying a hospital a set amount for every referral • Paying for a patient’s copays and deductibles to incentivize business • Giving patients free airline tickets to choose your hospital

16. Stark Self-Referral Laws Address the concern that financial incentives have tendency to corrupt the medical decision-making of those providing careand helps to ensure that medical decisions are made in the best interests of patients • Prohibits “referrals” by physicians • for “designated health services” • Inpatient and outpatient hospital services, Clinical laboratory, Radiology (including MRI, CAT scan, ultrasound) • to entities they have a “financial relationship” • No direct or indirect compensation arrangement with physician or family member • compensation for services, Rent for space or equipment, Discounts on goods/services • if no exception applies • Referrals to other physicians in the same group practice, In-office ancillary services (ex: self-owned x-ray machine), more • No specific intent is required (being “unaware” is not a defense) • Civil penalty: $15,000 per referral (No criminal jail time) • Example: A cardiologist paying a primary care physician $50 for every referral, a radiology practice giving a referring doctor 10% of the business

17. Other Laws Health Insurance Portability and Accountability Act (HIPAA) of 1996 • Required the establishment of national standards for electronic health care transactions • Increased privacy of PHI (Protected Health Information) • Provides eligible individuals who have recently lost their employer sponsored group health plan the opportunity to purchase health insurance coverage even if they have a preexisting health condition Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 • Allows those who lose their health benefits the right to purchase (for 102% of the cost) health benefits provided by their group health plan for limited periods of time- $1,250/month for family plan • COBRA also allows for coverage for up to 18 months in most cases

18. Informed Consent The consent of the patient must be obtained before any medical/surgical treatment is undertaken, unless an emergency justifies treatment • Failure to obtain proper consent may result in the torts of assault and battery as well as malpractice Consent can be: • Express • Oral or written • Implied (“inferred,” “presumed”) • Quite common (vaccinations, physical, routine office visit) • Emergencies (immediate treatment required to save life or limb) • Treat the emergency first; get consent later • When able, must prove that 1) the patient actually consented, 2) the person had full understanding and knowledge of the nature and extent of the treatment

19. Incompetent Adults • If wishes known, follow them • Living will, durable power of attorney, etc. • Conversations with loved ones, etc. • Point is to not use own judgment, but to judge what that patient’s own wishes would have been • If not known • Review benefit/burden with family • Involve ethics committee, if necessary • Build consensus • Termination of treatment and the right to refuse treatment is legal in all states, under the right circumstances

20. Duty to Treat • Under traditional law in most states, persons have no duty to aid another in peril unless their own activities have placed the other in danger • Hence, a physician has no common-law responsibility to respond to a call for help in the absence of a preexisting physician-patient relationship • However, if the doctor decides to help: • He has now created a physician-patient relationship and has a duty to exercise reasonable care under the particular facts and circumstances

21. Questions?